Transport Corporation of India Ltd: Valuation Shifts Signal Fair Price Attractiveness

Valuation Metrics and Recent Changes

As of 9 Feb 2026, TCI’s price-to-earnings (P/E) ratio stands at 18.25, a level that positions it within a fair valuation range compared to its historical averages and industry peers. This marks a departure from its previous status as an attractively valued stock, where lower P/E multiples had suggested undervaluation. The price-to-book value (P/BV) ratio at 3.42 further corroborates this shift, indicating that the stock is now trading at a premium relative to its book value, though not excessively so.

Other valuation multiples such as EV/EBITDA at 16.37 and EV/EBIT at 21.62 align with this moderate valuation stance. The enterprise value to capital employed ratio of 3.47 and EV to sales ratio of 1.70 also reflect a balanced pricing environment, neither signalling deep discount nor overvaluation. The PEG ratio of 1.41 suggests that the stock’s price is reasonably aligned with its earnings growth prospects, though it is slightly higher than the ideal threshold of 1.0 that typically indicates undervaluation.

Comparative Analysis with Industry Peers

When benchmarked against key competitors in the transport services sector, TCI’s valuation appears more measured. For instance, Delhivery trades at a P/E of 180.12 and EV/EBITDA of 59.13, categorised as risky due to its stretched multiples. Aegis Logistics and Blue Dart Express are deemed expensive with P/E ratios of 31.48 and 47.55 respectively, while Blackbuck is very expensive at a P/E of 29.43 and EV/EBITDA of 65.55.

Conversely, companies like VRL Logistics and TVS Supply Chain Solutions maintain attractive valuations with P/E ratios of 20.86 and 36.95 but significantly lower EV/EBITDA multiples of 9.15 and 8.56 respectively. Balmer Lawrie and Gateway Distriparks stand out as very attractive stocks with P/E ratios near 11.6 and EV/EBITDA below 10, highlighting the spectrum of valuation within the sector.

TCI’s current fair valuation grade, upgraded from a previous sell rating to a hold on 5 Feb 2026, reflects a cautious optimism. The company’s valuation is neither a bargain nor a premium, suggesting that investors should weigh fundamentals carefully before committing fresh capital.

Financial Performance and Return Analysis

TCI’s return profile over various time horizons offers a nuanced perspective. Over the past year, the stock has declined by 2.97%, underperforming the Sensex’s 7.07% gain. However, the medium to long-term returns are impressive, with a 3-year return of 73.45% and a remarkable 5-year return of 315.34%, significantly outpacing the Sensex’s 38.13% and 64.75% respectively. Over a decade, TCI has delivered a stellar 361.19% return compared to the Sensex’s 239.52%, underscoring its capacity for wealth creation over extended periods.

Daily price movements on 9 Feb 2026 showed a modest gain of 0.66%, with the stock closing at ₹1,065.35, slightly above the previous close of ₹1,058.35. The intraday range was ₹1,053.75 to ₹1,082.90, reflecting moderate volatility within a well-defined trading band. The 52-week high of ₹1,299.05 and low of ₹875.20 indicate a broad price range, with the current price sitting closer to the upper end, consistent with the fair valuation assessment.

Quality and Efficiency Metrics

TCI’s operational efficiency remains robust, with a return on capital employed (ROCE) of 15.76% and return on equity (ROE) of 18.16%. These figures demonstrate effective utilisation of capital and shareholder funds, supporting the company’s earnings quality. The absence of a dividend yield suggests reinvestment of earnings into growth initiatives, a common trait among transport services firms focused on expansion and infrastructure enhancement.

These quality metrics, combined with moderate valuation multiples, underpin the recent upgrade in the Mojo Grade from Sell to Hold, with a Mojo Score of 50.0. The market capitalisation grade of 3 indicates a mid-sized company with reasonable liquidity and investor interest.

Sector Outlook and Valuation Context

The transport services sector is undergoing transformation driven by technological adoption, regulatory changes, and evolving supply chain demands. Valuations across the sector vary widely, reflecting differing growth prospects and risk profiles. TCI’s fair valuation grade suggests that while the stock is no longer a deep value play, it remains a viable holding for investors seeking exposure to a fundamentally sound transport services company with a proven track record.

Investors should consider TCI’s valuation in the context of its peers and broader market conditions. The company’s moderate P/E and P/BV ratios, combined with solid returns and operational metrics, offer a balanced risk-reward proposition. However, the premium valuations of some peers and the attractive multiples of others highlight the importance of selective stock picking within the sector.

Investor Takeaway

Transport Corporation of India Ltd’s transition from an attractive to a fair valuation grade signals a maturing phase in its market pricing. While the stock no longer offers the deep value it once did, its solid fundamentals, consistent growth, and reasonable multiples justify a Hold rating. Investors should monitor sector developments and peer valuations closely, as shifts in market sentiment or operational performance could prompt further re-rating.

Given the company’s strong long-term returns and efficient capital utilisation, it remains a credible option for investors with a medium to long-term horizon. However, those seeking aggressive growth or deep value may find more compelling opportunities among its peers with lower valuations or higher growth potential.

In summary, TCI’s current valuation reflects a fair price that balances risk and reward, making it a prudent holding rather than a buy or sell candidate at this juncture.

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